Two Dow-listed stocks are predicted to skyrocket in the year 2025 and beyond.
The Dow Jones Industrial Average is a renowned collection of some of the most robust and financially successful companies in the market. Comprising a carefully chosen group of 30 companies, the index considers both their substantial growth and profit-generating abilities, as well as qualitative factors such as reputation and popularity among investors. The result is an elite club of distinguished American corporations.
Many investors delight at the thought of holding shares in each of these companies through an index fund, but there's an alternative method for amping up your Dow exposure. If you're ready to take on increased risk, consider diving into individual Dow members.
Two stocks that should catch your attention are Home Depot and Coca-Cola. Keep reading to discover why you should seriously consider adding these gems to your portfolio for 2025 and beyond.
1. Coca-Cola
With its fourth-quarter earnings report set to drop in mid-February, you need not wait to invest in the soda titan's shares. Coke's latest earnings report teemed with positive news, such as a 9% rise in organic revenue during Q3 - paving the way for a 10% yearly uptick. This impressive growth outlook recently nudged up a tad from the prior quarter, placing it within Coke's long-term targets. This megacorp also posted enhanced profitability and ample free cash flow.
So, what's the catch? Coke's recent growth came primarily from price hikes. Investors should watch for Coke's volume growth to return in crucial markets, like the US, to keep pace with the market in 2025. Without this rebound, Coke's stock might lag behind for yet another year.
Patient long-term investors need not worry. In the meantime, they can reap the stock's dividend, currently yielding a generous 3.18%. Beyond its divine beverages, Coke's portfolio includes popular brands like Powerade, Fuze Tea, and Topo Chico. These offerings will help bolster volume growth as the company navigates its way back.
2. Home Depot
As the sage investor Warren Buffett once said, "If you wait for the robins, spring will be over." Perhaps it's time to apply this opportunistic mindset to Home Depot, whose stock took a backseat during last year's market rally due to challenges in the housing and home improvement sectors. In a pinch, it's no easy feat to run a retail operation filled with high-priced items during tight economic times.
Unexpectedly, those pressures have squeezed Home Depot. In early November, the company revealed that its comparable-store sales declined by 1% in the core US market, predicting an overall decrease of 2.5% for the full 2024 fiscal year. Despite these challenges, Home Depot has emerged victorious in the past and should likely bounce back more robust than ever. Meanwhile, the industry leader continues to outperform rival Lowe's in sales growth and profit margin, generating optimism for the eventual turnaround.
The recovery might not kick off in 2025. But the most telling sign will be Home Depot's triumphant return to traffic growth. Though customer visits dwindled by 1% in the first three quarters ending in late October, shareholders of this Dow stock can rest easy in the face of Home Depot's steady market share gains and impressive return on invested capital. These achievements will allow Home Depot to keep returning cash to shareholders throughout 2025, amplifying their long-term returns through a growing dividend and stock buybacks.
- If you're looking to invest in the finance sector, Coca-Cola could be an excellent choice. With its impressive earnings and dividend yield, it's a strong contender for any portfolio looking for long-term growth.
- Money management involves making calculated investments, and Home Depot could be a smart choice for those willing to invest in the housing sector. Despite facing challenges in the past, its strong market position and history of resilience make it an attractive option for investors seeking potential returns in 2025 and beyond.
